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If the firm returned capital to a partner but treated it as drawings what is the main difference?

Answer and explanation

Correct answer: Wrong account will be affected under fixed capital method

Return of capital reduces capital account while normal drawings may go to current account. This difference is important under fixed method.

Related tags

Capital WithdrawalDrawingsDifferenceCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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